JERUSALEM (JPS) — Local Arab council heads have begun to encourage young Arab couples who can't find housing to settle in Jewish settlements near their villages, especially in the Nahal Irron area, Israel Radio reported Saturday.

The radio said the couples are forced to seek housing solutions in Jewish areas because of the shortage of homes in Arab villages in the Galilee. Many couples reportedly are not marrying because of the housing problem.

An Arab couple was recently accepted into the Katzir settlement near Umm el-Fahm, it said, but only after they threatened to petition the High Court of Justice if they were rejected. The couple was believed to have a good chance of winning the case. As a result, dozens of other Arab couples are looking into moving to towns that are part of a Housing Ministry project. Arab leaders believe the government has a deliberate policy of "suffocating" the Arab villages and towns.

Ten Israeli bankers indicted for fraud

JERUSALEM (JPS) — Ten senior employees of Israel's Bank Discount were indicted on charges of stock manipulation, fraud, and conspiracy in what the Securities Authority described as the "largest white-collar crime case ever."

In two separate indictments, spreading over hundreds of pages, the state attorney's tax and finance department accuses Yitzhak Cohen, Aryeh Adler, Teddy Saguy, Ofer Heldstein, David Weinman, Efraim Kutchinsky, Ehud Ya'acov, Mordechai Merkado, Michael Oron, and his daughter Rinat of stock manipulation offenses during 1993 and 1994.

According to the first indictment, Heldstein, Weinman, Kutchinsky, Ya'acov, and Merkado bought securities and deposited them into the private bank accounts of Adler, Saguy, and the Orons, then artificially raised their prices. Among the shares they manipulated were those of Keren Makefet and the Ports and Railways Authority.

After the prices had been artificially raised, the bank account holder would sell the shares to the others and the profits were allegedly divided between them.

Cabinet pledges Jerusalem sovereignty

JERUSALEM (JPS) — Israel is determined to maintain all of Jerusalem under its exclusive sovereignty, the Cabinet reaffirmed Sunday in a rare publicly-broadcast ceremony in honor of the 28th anniversary of the city's reunification.

Prime Minister Yitzhak Rabin declared, "All governments of Israel, including the present government, have been fully confident that what was determined in 1967, what was legislated in 1988 — transforming Jerusalem into a unified city under Israeli sovereignty, the capital of Israel, the heart of the Jewish people — these are facts that will endure for eternity.

"All governments of Israel," he added, "have accepted upon themselves the commitment to respect the sanctity of Jerusalem, for other religions as well, and all governments of Israel have preserved — and this government will continue to preserve — freedom of religion, and freedom of access…to their holy sites."

The Cabinet's message said: "The cabinet will act to strengthen the status of united Jerusalem as the exclusive capital of Israel, and will fight any attempt to impair this status."

Jerusalem McDonald's is picketed by Kach

JERUSALEM (JPS) — Seven demonstrators, most of them former Kach activists, demonstrated in front of a new McDonald's, which opened Sunday in the center of Jerusalem.

One of the protesters, Itamar Ben-Gvir, said he is against all non-kosher restaurants in the capital, but that McDonald's — more than anything else — symbolizes "cheap western values" and the "weakening of the Jewish character of the state."

Later this year, McDonald's is to open its first kosher restaurant in Israel.

Israeli banks slice interest rates by .5%

JERUSALEM (JTA) — The Bank of Israel cut interest rates by half a percent Monday, in response to positive results in its anti-inflation policy.

The new interest rate, scheduled to go into effect Thursday, will be 13.5 percent.

Following the Bank of Israel's lead, major banks announced that they, too, would cut commercial lending rates by half a percent.

Palestinians uncover Hamas arms arsenal

JERUSALEM (JTA) — Palestinian police found a cache of arms belonging to the Hamas fundamentalist group in a building in the Gaza Strip last week.

The arsenal — hand grenades, ammunition, forged Israeli identity cards and electronic equipment, apparently for making bombs — was hidden in a compartment in a chicken coop, Israel Television reported.

Meanwhile, Palestinian officials denied reports that Palestine Liberation Organization leader Yasser Arafat was the target of an assassination attempt.

Earlier news reports that a bomb had been placed in Arafat's Gaza City office and then safely dismantled were false, the officials said.